Combating the Undervaluation of Women’s Work:
Why New Zealand Should Have Pay Equity Legislation
Lauren Zwi
October 2016
A dissertation submitted in partial fulfilment of the degree of Bachelor of Laws
(Honours) at the University of Otago, Dunedin, New Zealand
Acknowledgements
To my supervisor, Associate Professor Selene Mize, for your guidance, patience and
feedback par excellence.
To the tutors in 9N12, who have made this experience so much more enjoyable. For the
laughs, the late nights and the camaraderie.
To my friends and flatmates who have made my time in Dunedin so special. To Anna and
Josie, for being there since day one, I could not have done this without your friendship
and humour.
To my family for the love, support and proof reading. Especially to Jason, for taking time
out of your travels to provide invaluable advice and feedback.
2
Table of Contents
I
INTRODUCTION ..................................................................................................................4
II CHAPTER ONE - THE UNDERVALUATION OF WOMEN’S WORK IN NEW
ZEALAND .......................................................................................................................................7
A
ESTABLISHING THE UNDERVALUATION OF WOMEN’S WORK.............................................7
1
Occupational Segregation ...............................................................................................7
2
Lower Remuneration for Female-Dominated Occupations ............................................9
B
WHY WOMEN’S WORK IS UNDERVALUED ........................................................................10
1
Historical Factors .........................................................................................................10
2
Societal and Cultural Factors .......................................................................................12
3
The Undervaluation of Women’s Innate Skills ..............................................................13
4
Models of Discrimination ..............................................................................................14
C
SUMMARY ..........................................................................................................................15
III CHAPTER TWO – THE HISTORY AND CURRENT STATE OF PAY EQUITY IN
NEW ZEALAND ..........................................................................................................................16
A
THE EQUAL PAY ACT 1972 ................................................................................................16
1
Legislative Intention ......................................................................................................17
2
Subsequent Interpretation by the Courts .......................................................................18
B
THE EMPLOYMENT EQUITY ACT 1990 AND ITS AFTERMATH ...........................................19
C
THE TERRANOVA CASE .....................................................................................................20
D
GOVERNMENT INTERVENTION ...........................................................................................22
E
SUMMARY ..........................................................................................................................24
IV CHAPTER THREE - SHOULD NEW ZEALAND HAVE PAY EQUITY? .................25
A
ARGUMENTS AGAINST PAY EQUITY ..................................................................................25
1
Free Market Ideology ....................................................................................................26
2
Flaws in Job Evaluation Systems ..................................................................................28
3
Workability Concerns ....................................................................................................32
4
It’s a Matter of Choice ..................................................................................................34
B
ARGUMENTS IN FAVOUR OF PAY EQUITY .........................................................................36
1
It’s a Matter of Justice and Fairness .............................................................................36
2
Decreased Inequality is Better for Everyone.................................................................37
3
International Obligations ..............................................................................................39
C
SUMMARY ..........................................................................................................................39
V
CONCLUSION .....................................................................................................................41
VI
BIBLIOGRAPHY ................................................................................................................42
3
I Introduction
There are villages in which men fish and women weave, and in which women fish and
men weave, but in either type of village the work done by the men is valued higher
than the work done by the women.
– Margaret Mead, cultural anthropologist.1
The systemic undervaluation of women’s work2 is a global phenomenon which results in
lower wages for female employees worldwide.3 Systemic undervaluation refers to the fact
that female-dominated occupations are consistently paid less, for the very reason they are
preformed mostly by women.4 Such occupations are subject to historic and structural
gender bias, and thus wage rates are “artificially depressed relative to what those wages
would be if these jobs were being performed by white males.”5 This injustice represents a
barrier which must be overcome before gender equality can be realised.
Overseas, the systemic undervaluation of women’s work is mitigated in many countries
through pay equity, an approach that New Zealand has so far failed to implement.
Fortunately, pay equity in New Zealand is up for debate again due to the recent Court of
Appeal case Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa
Tota Inc (Terranova), which held that the Equal Pay Act 1972 (EPA) does provide for pay
equity.6 Now that the Government has intervened, New Zealand is at a crossroads.7 It could
choose to back away from pay equity, it could make a half-hearted policy attempt to try
rectify the undervaluation of women’s work, or it could fully implement new pay equity
legislation to prevent the further exploitation of women. This dissertation argues for the
third option, and asserts that New Zealand should have pay equity legislation.
A major hurdle faced by pay equity is the ambiguity and lack of understanding attached to
both what it aims to do, and how it aims to do it. Pay equity, also known as comparable
worth, stands for the principle that women should get equal pay for work of equal value.
1
Maya Altman Comparable Worth: Every Woman's Right (Albany, New York, 1983) at 1.
“Women’s work” as a phrase is not being used to suggest that there is work that is more suitable for
women to carry out, but rather is referring to the fact that there are jobs which are dominated by females
and historically always have been.
3
Jill Rubery Pay equity, minimum wage and equality at work: theoretical framework and empirical
evidence (International Labour Office, Working Paper 19, 2003) at 1.
4
Ronnie J. Steinberg “‘A Want of Harmony’: Perspectives on Wage Discrimination and Comparable
Worth” in Helen Remick (ed) Comparable Worth and Wage Discrimination: Technical Possibilities and
Political Realities (Temple University Press, Philadelphia, 1984) at 4.
5
At 4.
6
Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2013] NZCA
575 [Terranova].
7
Paul Roth “Employment Law” [2016] NZ L Rev (forthcoming) at 5.
2
4
This is distinct from pay equality, which stands for the concept that men and women should
get equal pay for doing equal jobs. Pay equity instead is targeted at achieving equal pay for
women doing work which is of equal value to men’s work. While pay equality targets direct
discrimination by employers, pay equity tackles systemic discrimination which has arisen
from historical and structural features of the labour market. 8
Pay equity’s relationship with the gender wage gap is also often misinterpreted. While the
gender pay gap is focused on earning differentials between men and women, pay equity is
focused on the wage differential between men’s and women’s work.9 It is aimed at
removing only that portion of the overall gender wage gap which relates to occupational
segregation, and even then only where a predominately female job is found to be
undervalued in comparison to men’s work.10 The scope of pay equity is therefore relatively
limited, and it alone cannot eliminate the gender wage gap. Rather, it has a narrow focus
to fix a particular problem in society.
Typically, pay equity laws follow similar generic steps but differ greatly in specifics and
implementation.11 Generally, the first step is to identify male- and female-dominated
occupations, and then to determine the value of these jobs by using a gender-neutral job
evaluation scheme.12 Next, comparisons are made to determine whether equally ranked
female and male jobs are paid similarly. Finally, pay adjustments are made where
predominately female jobs are found to be undervalued, usually resulting in a wage
increase for undervalued female jobs.13
This dissertation will begin by highlighting the need for pay equity in New Zealand.
Chapter One establishes that the prerequisite condition for pay equity exists in New
Zealand, namely, the undervaluation of women’s work. This provides the initial
justification for the enactment of pay equity legislation, as it demonstrates that there is a
problem that needs to be addressed. The reasons why female-dominated occupations are
undervalued are also discussed.
8
Linda Hill “Equal pay for work of equal value: making human rights and employment rights laws work
together” (2004) 21 Social Policy Journal of New Zealand 1 at 8.
9
Pat Armstrong “Pay Equity Lessons from Canada” (paper presented to New Zealand Conference on Pay
and Employment Equity for Women, Wellington, June 2004) at 4.
10
At 4.
11
Elaine Sorensen Comparable Worth: Is it a Worthy Policy? (Princeton University Press, New Jersey,
1994) at 57.
12
Morley Gunderson Comparable Worth and Gender Discrimination: An International Perspective
(International Labour Organisation, Geneva, 1994) at 31.
13
At 31.
5
Chapter Two then explores pay equity’s unsuccessful history in New Zealand, and
evaluates its current uncertain status. In doing so, Chapter Two sets the scene for Chapter
Three, by putting pay equity into the New Zealand context, and by demonstrating that
although New Zealand has come close to achieving equal pay for work of equal value, it
has not yet succeeded. Chapter Two will also discuss what pay equity mechanisms have
been ineffective in the past and why, coming to the conclusion that if pay equity is to be
attempted again, it should be done through comprehensive new legislation.
Finally, Chapter Three argues that New Zealand should have pay equity legislation. It
considers the common arguments made against its implementation, before demonstrating
that such criticisms are overstated, incorrect or misguided. Chapter Three then advances
the arguments in favour of pay equity legislation, coming to the conclusion that New
Zealand should have equal pay for work of equal value as a matter of simple fairness, for
the benefit of women and the economy, and to ensure that New Zealand meets its
international obligations.
6
II Chapter One - The Undervaluation of Women’s Work in New Zealand
[W]omen are paid less because they are in women’s jobs, and women’s jobs are paid
less because they are done by women.
Sharon Shepela and Ann Viviano14
Pay equity is based on the premise that female-dominated occupations are often
undervalued by the labour market, and hence underpaid for the skills, conditions,
responsibilities and effort involved. Pay equity seeks to rectify this by lifting remuneration
to that of male-dominated occupations identified as comparable through job evaluations.
This chapter validates the claim that women’s work is undervalued in New Zealand, and
therefore establishes the justification for using pay equity to remedy it. It then examines
the historical, cultural and social roots of this undervaluation in a bid to better understand
how it may be rectified through pay equity. It will become clear that skill evaluation and
pay are in part social constructs and are influenced by history and social norms, rather than
being based on objective measurements, and thus are prone to minimising the value in
women’s work.15
A Establishing the Undervaluation of Women’s Work
Establishing that the systemic undervaluation of women’s work does occur in New Zealand
and that it is a live problem is the first step in justifying pay equity.
1 Occupational Segregation
Occupational segregation is the term used to describe the fact that different groups in
society, for example women or minorities, are commonly grouped in certain occupations.
Pay equity focuses on occupational gender segregation, specifically horizontal segregation,
which describes the fact men and women generally work in different occupations. Vertical
segregation, on the other hand, is a term used to describe the fact that men are commonly
found in higher hierarchical positions than women, an equally important issue which is not
solved by pay equity.16
14
Sharon Toffey Shepela and Ann T. Viviano “Some Psychological Factors Affecting Job Segregation and
Wages” in Helen Remick (ed) Comparable Worth and Wage Discrimination: Technical Possibilities and
Political Realities (Temple University Press, Philadelphia, 1984) at 47.
15
Prue Hyman “Low Waged Work and Gender Pay Equity in New Zealand” (paper presented to New
Zealand Conference on Pay and Employment Equity for Women, Wellington, June 2004) at 4.
16
Stephanie Steinmetz The Contextual Challenges of Occupational Sex Segregation: Deciphering CrossNational Differences in Europe (VS Verlag für Sozialwissenschaften, Germany, 2012) at 18.
7
Occupational segregation is intrinsically related to pay equity, as both a precondition and
a consequence of the undervaluation of women’s work. It acts as a precondition as without
occupational gender segregation, there would not be predominantly female occupations,
characterised as women’s work, to be subsequently undervalued as a result of these gender
labels.17 Occupational segregation is also continually entrenched due to the undervaluation
of female-dominated occupations, as it limits job options and creates hiring norms that
make it harder for women to work in men’s jobs and vice versa. Additionally, the low
remuneration common in women’s work discourages men from choosing to work in
female-dominated jobs.18 It is therefore probable that where a pay equity policy is
successful, occupational segregation will decrease.19
New Zealand’s labour market is highly segregated by gender. Nearly half of all female
workers are employed across the 20 most common occupations for women, whereas the
corresponding number for men is only 37%.20 This reveals that women are concentrated in
a much narrower range of occupations than men. The ten occupations containing the largest
percentage of women workers are sales assistants, general clerks, registered nurses,
caregivers, primary school teachers, cleaners, early childhood teachers, technical
representatives, information clerk/receptionists and administration managers.21 While sales
assistant is the most common occupation for women (5.6% of all employed women), for
men the most common occupation is a general manager (3.9%).22
The most heavily female-dominated occupations are secretaries and keyboard operating
clerks,
nursing and midwifery professionals,
primary and early childhood teaching
professionals,
client information clerks,
personal care workers, and
special education
teaching professionals.23 These occupations range from 93.6% to 84.4% female.24
Furthermore, these statistics have only decreased slightly since 1991, indicating that
occupational segregation has become a constant feature of New Zealand’s labour market.25
17
Paula England “Socioeconomic Explanations of Job Segregation” in Helen Remick (ed) Comparable
Worth and Wage Discrimination: Technical Possibilities and Political Realities (Temple University Press,
Philadelphia, 1984) at 29.
18
Steinmetz, above n 16, at 19.
19
Helen Remick “Preface” in Helen Remick (ed) Comparable Worth and Wage Discrimination: Technical
Possibilities and Political Realities (Temple University Press, Philadelphia, 1984) at xii.
20
Statistics New Zealand Women at Work: 1919-2013 (October 2015) at 13.
21
At 13.
22
At 13.
23
At 15.
24
At 15.
25
At 10.
8
2 Lower Remuneration for Female-Dominated Occupations
Having demonstrated that the New Zealand labour market is highly segregated, this section
will illustrate that predominately female occupations are often paid less than maledominated jobs. A recent study carried out by Statistics New Zealand found that the median
annual income for those working in the most common male-dominated jobs was, on
average, $3,600 more than those in female-dominated occupations.26 The study also found
that the five lowest paying occupations were all predominately female occupations.27 Other
studies confirm these findings, concluding that income tends to be lower for women in
female-dominated occupations, and that they are paid less than comparable maledominated occupations.28
Furthermore, the Statistics New Zealand report is likely to have underestimated the real
wage disparity between predominately male and predominately female work, as it
restricted its analysis to adults working 30 hours or more per week. 29 This has likely
resulted in an underestimation because 36% of employed women work part-time;30 they
are much more likely than men to work part-time (70.4% of people who work part-time
are women).31 These part-time jobs are also most “commonly concentrated in the femaledominated service and community sectors, at low rates of pay.”32 This means that a large
proportion of the lowest paid women were not taken into account. If they had been, the
discrepancy between female- and male-dominated occupations would have likely
increased.
Assessing the estimated effect of occupational segregation (female-dominated
occupations) on the gender pay gap is another way to demonstrate the existence of pay
discrepancy between male- and female-dominated occupations. In New Zealand, the
gender pay gap is currently estimated at 11.8%.33 It is estimated that occupational
segregation accounts for about one third of the 11.8% gender pay gap.34 This provides
26
At 28.
At 30.
28
Prue Hyman “Pay Equity and Equal Employment Opportunity in New Zealand: Developments
2006/2008 and Evaluation” (2008) 33(3) New Zealand Journal of Employment Relations 1 at 2.
29
Statistics New Zealand Women at Work, above n 20, at 28.
30
National Advisory Council on the Employment of Women Critical Issue for New Zealand Women’s
Employment, Now and in the Future (Department of Labour, June 2008) at 13.
31
Statistics New Zealand “2013 Census QuickStats about work and unpaid activities: Work and labour
force status of adults in New Zealand” (31 March 2015) www.stats.govt.nz/ at figure 3.
32
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value (September 2002) at 10.
33
Ministry for Women “Gender Pay Gap” <www.women.govt.nz/>.
34
Ministry for Women “Occupational Segregation” <www.women.govt.nz/>.
27
9
further evidence for the fact that predominately female occupations tend to be lower paid
than those dominated by men.
B Why Women’s Work is Undervalued
The undervaluation of women’s work is often referred to as the systemic or historic
undervaluation of female-dominated occupations. It is accepted that this undervaluation is
not caused by conscious discrimination or active choices, but rather it is a symptom of
cultural norms, gender stereotypes, and historical discriminatory labour practices.35 Due to
the unintended nature of the undervaluation of women’s work, it is much harder to combat
than deliberate discrimination and pay equality issues.
1 Historical Factors
The Lord spoke to Moses and said 'Speak to the Israelites in these words. When
a man makes a special vow to the Lord which requires your valuation of living
persons, a male between twenty and fifty years old shall be valued at fifty silver
shekels, that is shekels by the sacred standard. If it is a female, she shall be
valued at thirty shekels.’
Leviticus 27:1-4
Since biblical times, women have been paid less than men, and women’s work has been
undervalued.36 Women have traditionally been seen as secondary players in the labour
market. The subsequent undervaluation of their work in contemporary society is partially
derived from this fact, and partly from the interconnected history of legal discrimination
and discriminatory pay practices.37 Until the Government Service Equal Pay Act of 1960
and then the EPA of 1972, it was legal to discriminate by gender for pay in New Zealand,
a fact that was fully taken advantage of by employers. This has had lingering effects on the
labour market. Deeply rooted practices, such as pay structures, still reflect traditional,
rather than contemporary, valuations of skills and performance, resulting in lower pay for
female-dominated occupations. The residue of historical practices also affects modern
perceptions of the cultural appropriateness of particular kinds of work, contributing to
occupational segregation.
35
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 4.
36
Morley Gunderson “Male-Female Wage Differentials: How Can That Be?” (2006) 39(1) The Canadian
Journal Economics 1 at 2.
37
Rosemary Du Plessis Novitz and Nabila Jaber “Pay equity, the ‘free’ market and state intervention”
(1990) 15 New Zealand Journal of Industrial Relations 251 at 252.
10
Prior to World War II (WWII), women were essentially confined to working in either
domestic services, shop work, sewing, nursing or teaching, and were expected to stop
working once they were married.38 The commencement of WWII, however, changed
women’s involvement in the labour market worldwide. For a change, women became key
players in the labour market and were expected to take up the jobs left by soldiers to
contribute to the war effort.39 Once the war was over, it was deemed women had earned
their place in the labour market, thus it was socially acceptable for married women to work.
Despite this progress, women’s legal minimum wage was still limited to 70% of the male
rate following the end of the war.40
Moreover, several laws, and health and safety regulations, actively limited women’s
participation in the labour market.41 For example, the Machinery Act 1950 discriminated
against women by not allowing them to operate engines or clean machinery until they were
20 years old, while their male counterparts were allowed at the age of 18.42 The Shops and
Offices Act 1955 also discriminated against women, by not allowing them to work at
certain hours of the day, and by limiting the total number of hours they could work.43 The
Factories Act 1946 likewise limited the total hours women could work, and women were
only permitted to work at certain times.44
The industrial awards system, which characterised the New Zealand labour market up until
the enactment of the Employment Contracts Act in 1991, also inevitably disadvantaged
women workers. Awards were set by an arbitration court, which had the power to adjust
the minimum wage and working conditions for occupations as a result of industrial disputes
led by unions.45 However, even if women did the same job as men, awards expressly
provided for lower rates for female employees.46 Women also had less power and
representation in the unions, which meant that women’s interests were secondary to men’s
when it came time to negotiate awards. 47 Although discriminatory awards were deemed
unlawful under the Government Service Equal Pay Act 1960 and the EPA, the residual
38
Megan Cook “Women’s labour organisations – Women’s unions and associations, 1878 to 1939” (5
May 2011) Te Ara – the Encyclopedia of New Zealand <www.teara.govt.nz/>.
39
Coalition for Equal Value Equal Pay “1940s to 1960s” (February 2004) <www.cevep.org.nz/>.
40
Coalition for Equal Value Equal Pay, above n 39.
41
Steinmetz, above n 16, at 21.
42
(29 August 1972) 380 NZPD 2181.
43
At 2181.
44
At 2181.
45
Mark Derby “Strikes and labour disputes – The Industrial Conciliation and Arbitration Act” (1 March
2016) Te Ara – the Encyclopedia of New Zealand <www.teara.govt.nz/>.
46
Terranova, above n 6, at [22].
47
Marie-Thérèse Chicha A comparative analysis of promoting pay equity: models and impacts
(International Labour Office, Working Paper 49, September 2006) at 7.
11
effects are still evident in today’s labour market, through the undervaluation of women’s
work.
2
Societal and Cultural Factors
The underpayment of women’s work also has foundations in societal and cultural norms,
some of which are historic and some that are still operative today. One of the the most
obvious gender stereotypes that has influenced how women are seen as employees is the
traditional role of wife and mother. The doctrine of separate spheres meant that women
were confined to the ‘private’ sphere of the household and domesticity, while men’s role
in the ‘professional’ sphere was to work and act as the breadwinner for the family.48 This
was the social norm for a long time, and arguably still is. It was only in the necessity of
WWII that it became socially acceptable for married women to work, but still only as a
supplementary, less important source of income. Women were also still confined to roles
deemed ‘appropriate’ for women, as “stereotypes in society about appropriate roles for
women and men are replicated in the labour market.”49
Women were paid less in part because it was deemed they did not need to earn a living
wage, as they would already be supported by their husband or family.50 Anything that
women earned was seen as ‘pin money’, to be used on non-essential items. Clearly little of
this rationale for paying women less survives today, however it can still be perceived in
the pay structures of some occupations, resulting in the undervaluation of women’s work.
It is theorised that these gender biases have translated into modern pay structures in the
following way:51
Often jobs would attract and employers would seek women because the task was
stereotyped as “female” and thus employers thought women more appropriate. In these
cases, we speculate that they set wages lower both because women were thought to
need and deserve lower wages than men…and because the cultural devaluation of
women had “rubbed off” onto female-typed tasks.…After these initial causal effects
of sex composition on wages or vice versa, institutional inertia could freeze the
relationship in. Institutional economists’ and industrial psychologists’ studies of wage
48
Steinmetz, above n 16, at 21.
At 42.
50
Michael McCann Rights at Work: Pay Equity Reform and the Politics of Legal Mobilization (University
of Chicago Press, Chicago, 1994) at 26.
51
Paula England and others “Does Bad Pay Cause Occupations to Feminize, Does Feminization Reduce
Pay, and How Can We Tell with Longitudinal Data?” (paper presented to annual meeting of the American
Sociological Association, San Francisco, August 2004) at 29-30.
49
12
systems emphasize that hierarchies of the relative pay levels of jobs are surprisingly
rigid.
3 The Undervaluation of Women’s Innate Skills
A further reason that women’s work is undervalued is because the skills utilised in
women’s work are undervalued. This is because such skills are often seen as innate or
natural skills (as opposed to acquired skills), and as an extension of women’s unpaid work
in the home.52 The historic undervaluation of these skills has not been reassessed, hence
the need for pay equity.
Women are most commonly employed in service and care work, which rely on skills such
as patience, interpersonal and emotional skills, attention to detail and fine motor skills.53
Such skills are overlooked when valuing jobs, and are deemed lower in value due to the
fact they are seen as innate women’s skills.54 As remuneration is partially based on the skill
and characteristics an employee is seen to bring to the job, the low regard for women’s
skills results in lower wages.55 Consequently, women’s work is undervalued. For example,
while men are remunerated for heavy lifting on construction sites, the lifting of children or
patients by kindergarten teachers or nurses is characterised as natural ‘women’s work’, and
hence not valued.56 Further, little worth is attached to the responsibility of caring for
children or the elderly, yet caring for equipment or resources in men’s work is highly
valued.57
Attributes and characteristics that are seen as intrinsic to women are also undervalued. For
example, the psychological attribute of agreeableness (being “trusting, straightforward,
altruistic (warm), compliant, modest, and sympathetic”) is more common in women than
in men. 58 However this attribute is not awarded extra value in female employees, but rather
is expected. For men the reverse is true, as the characteristic of being disagreeable is often
considered valuable, but it is not for women. Thus “the gender difference in agreeableness
52
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 4.
53
Chicha, above n 47, at 6.
54
Shepela and Viviano, above n 14, at 47.
55
At 47.
56
New Brunswick’s Wage Gap Reduction Initiative “Wage Gap Contributor: Under-valuation of
Traditional Female Occupations” <www.gnb.ca>.
57
New Brunswick’s Wage Gap Reduction Initiative, above n 56.
58
Francine D. Blau and Lawrence M. Kahn The Gender Wage Gap: Extent, Trends, and Explanations
(Institute for the Study of Labour, Discussion Paper No. 9656, January 2016) at 39.
13
contributed to the gender earnings gap both because men were considerably more
disagreeable than women, but also because only men were rewarded for this trait.” 59
4 Models of Discrimination
Two different economic models of discrimination, the crowding hypothesis and the
institutional model, seek to explain why female-dominated occupations are undervalued,
taking into account the factors discussed above. For the purposes of these models,
discrimination means “the pay difference between two groups of workers that is not
accounted for by productivity differences.”60 Although it is hard to gauge their accuracy,
both models are useful to add to understanding about why women’s work is undervalued.
The institutional theory of labour market discrimination argues that:61
…certain firms develop internal labor markets. Within these labor markets the
determination of wages and the allocation of workers are governed by a set of rules
and customs rather than direct supply and demand…Societal norms and prejudices
influence management’s view…Firms with internal labor markets incorporate and
reinforce these norms by using gender to assign individuals different occupations.
They also pay “women’s work” less than they would if it were performed by men,
simply because “women’s work” is less valued by society. Thus, internal labor
markets reflect and reproduce societal discrimination against women.
It is suggested that such internal labour markets are more common in large firms and in the
public sector.62 This theory is helpful for explaining how societal and cultural norms
become embedded in pay structures, and also why normal market forces of supply and
demand have failed to reset the value of women’s work according to the skill involved, and
therefore have kept the pay for these jobs artificially depressed. This has important
implications for pay equity in New Zealand, as it suggests that pay equity could remedy
the many undervalued female-dominated occupations within the public sector, including
care work.
The crowding hypothesis also considers occupational segregation and the undervaluation
of women’s work to be crucial, as it argues that:63
59
At 39.
Sorensen, above n 11, at 43.
61
At 47-48.
62
At 48.
63
At 48.
60
14
…employers discriminate against women by excluding them from occupations
considered to be ‘men’s work’. Since these jobs are reserved for men, relatively few
women are hired into these positions. Given that the demand for women in these jobs
is limited, they are crowded into other occupations, typically referred to as ‘women’s
work’. The supply of women accordingly increases for ‘women’s work’, which in turn
reduces their wage.
The crowding hypothesis is more relevant in the private sector, and places more direct
blame on employers for their role in occupational segregation.64 This theory also provides
valuable insights as to why women’s work is undervalued, and helps explain the
relationship between occupational segregation and lower wages. Barbara Bergmann
additionally argues that because low wages are associated with women, even when women
move into male jobs they are paid less, as employers know that their alternative option,
women’s work, is poorly paid.65
C Summary
It is clear that in New Zealand women’s work is undervalued. This undervaluation does
not arise due to differences in productivity, or valid skill assessments, but rather is due to
socially determined wage structures which have been influenced by past discrimination
and deeply-rooted social norms. Further, studies have shown that the relationship between
women’s work and low pay is deeply entrenched, and has experienced “institutional
inertia”, signifying that without invention, the problem will persist.66 This provides the
justification, and demonstrates the need for pay equity legislation in New Zealand, in order
to eliminate past prejudices from the remuneration of women’s work. This is important to
ensure that women are being equally valued in society as employees, not merely as
housewives.
64
At 48.
Rubery, above n 3, at 8.
66
England and others, above n 51, at 31.
65
15
III Chapter Two – The History and Current State of Pay Equity in New
Zealand
In Australia, one of the most frequently cited quotes on pay equity is from Justice Mary
Gaudron, who stated “[w]e got equal pay once, then we got it again, and then we got it
again, and now we still don’t have it.”67 In a New Zealand context, it could be argued that
pay equity was achieved in 1972 with the EPA, then again in 1990 with the Employment
Equity Act 1990 (EEA), and then again in 2015 with the Court of Appeal ruling in
Terranova, and yet these events have still fallen short of an effective pay equity remedy.
This chapter sets out the history of pay equity in New Zealand, and demonstrates that the
various attempts made so far to secure pay equity, be it legislation or policy, have failed to
achieve justice for women. It further demonstrates that the current recommendations, albeit
an improvement from the status quo, are not the best way forward, as the uncertainty and
subsequent ineffectiveness of the EPA makes it ill-suited as an instrument to implement
pay equity in New Zealand. If New Zealand is going to pursue pay equity, it should be
done properly with a comprehensive new Act which adequately addresses the complexities
involved, in order to give pay equity the best chance of success.
A The Equal Pay Act 1972
Pay equity first became a real possibility in 1972 under the EPA. Although the EPA clearly
provided women in the private sector with equal pay for equal work,68 it was unclear at the
time it was first implemented whether it also provided for pay equity. The wording of s
3(1)(b) permits a potential interpretation requiring equal pay for work of equal value, as it
states that when determining the equal pay rate, the following criteria be applied:
…for work which is exclusively or predominantly performed by female employees,
the rate of remuneration that would be paid to male employees with the same, or
substantially similar, skills, responsibility, and service performing the work under the
same, or substantially similar, conditions and with the same, or substantially similar,
degrees of effort.
This phrasing seems to suggest that for female-dominated occupations, comparisons may
be made to male employees doing similar work where the skills, responsibility, conditions
and effort are substantially similar. Although this could be interpreted as allowing for pay
equity, it could also just be seen as an attempt by the legislature to thwart awards and
67
Barbara Pocock “Equal Pay Thirty Years On: The Policy and Practice” (1999) 32(3) The Australian
Economic Review 279 at 279.
68
This had already been achieved in the public sector via the Government Services Equal Pay Act 1960.
16
employers who paid men more for doing substantially the same work as women, but under
a different job title.69 For example, an employer could call male administrative staff “office
assistants” and female administrative staff “secretaries”, even though they did the same
job. The cumbersome and ambiguous wording of s 3(1)(b) of the EPA means that the
section has long been the subject of much contention.70
1 Legislative Intention
It is unclear what the actual intentions of the legislators were when drafting the Act.
Elizabeth Orr, who was a member of the Equal Pay Review Committee in 1975 and 1979,
is of the opinion that Parliament did intend the EPA to act as pay equity legislation.71 She
first analyses the 1971 Commission of Inquiry into Equal Pay72, as it is from this report
that the EPA was based.73 She contends the Commission advocated fully for implementing
the legislative recommendations of the International Labour Organisation’s (ILO)
Convention Concerning Equal Remuneration for Men and Women Workers of Equal Value
(Convention 100)74, which means they were recommending pay equity legislation, and that
this advice was followed by the legislators with only minor variations.75
Regardless of the Commission’s intentions, the report itself contains many inconsistencies,
and does not explicitly recommend the adoption of equal pay for work of equal value. The
report does recognise that wage differences often arise from a degree of occupational
segregation, even noting that while men are paid as individuals, “women are paid as
members of a category of lesser economic worth” which is “based on tradition and is
without justification.”76 It also acknowledged the existence of the concept of equal pay for
jobs where “the work, effort, skill, responsibility, etc.” were equal, but fails to conclude on
whether this should be included in the scope of “equal pay”.77 The report does however
69
Kirsten Slatter “Towards pay equity in New Zealand? A study of the Employment Equity Act 1990”
(BA(Hons) Dissertation, University of Otago, 1990) at 10.
70
Terranova, above n 6, at [82]-[85].
71
Elizabeth Orr “Equal Pay for Work of Equal Value in New Zealand: A History of the 1960 and 1972
Equal Pay Acts” (paper presented to the Women’s Studies Conference, Palmerston North, November 2003)
at 6.
72
Commission of Inquiry into Equal Pay Equal Pay in New Zealand (A. R. Shearer, Government Printer,
H. 54, September 1971).
73
Orr, above n 71, at 5.
74
International Labour Organisation Convention Concerning Equal Remuneration for Men and Women
Workers of Equal Value (No 100) 165 UNTS 303 (opened for signature 29 June 1951, entered into force 23
May 1953). Article 2 states that “Each Member shall…ensure the application to all workers of the principle
of equal remuneration for men and women workers for work of equal value.”
75
Orr, above n 71, at 5.
76
Commission of Inquiry into Equal Pay, above n 72, at 12.
77
At 19.
17
cite the difficulties in establishing criteria for job evaluation, an integral step in
implementing pay equity, and says that it should not be attempted.78 It also comes to the
conclusion that its “task was not to replace the present complex basis of wage
determination”, which is what pay equity legislation must do to remedy systemic
undervaluation.79 As Justice French was later to note in Terranova, “[t]he ambiguity in the
Commission report is such that all parties in this case were able to identify passages that
supported their competing interpretations.”80
Orr also relies on parliamentary debates to support her contention that the EPA was created
as a piece of pay equity legislation, but these too are fraught with contradiction and
inconsistency.81 She refers to the speech from the Minister of Labour, David Thomson,
who claims the Bill will eliminate gender wage discrimination more so than legislation in
any other country, and that it will cover female intensive occupations.82 But again, this is
inconclusive, as such statements can apply to both pay equality and pay equity. Hugh Watt,
Deputy Leader of the Opposition, welcomed “the introduction of a Bill that provides for
equal pay for people doing equal work”, which suggests that he interpreted the Bill as being
one of pay equality.83 On the other hand, Robert Muldoon, the Minister of Finance,
recognised the difficulty in “determining just what is equal pay for equal tasks”, which
could indicate a pay equity approach.84 Overall, it is impossible to draw any certain
conclusions surrounding the parliamentary intent of the EPA. This ambiguity at the EPA’s
inception, as well as the awkwardness of its drafting, is arguably what is responsible for its
subsequent lack of success and limited impact.
2 Subsequent Interpretation by the Courts
Notwithstanding the ambiguous wording and unclear parliamentary intent, when the first
test case for pay equity was finally brought in 1986 by the Clerical Workers Union, the
Arbitration Court held that it did not have the jurisdiction to hear equal pay for work of
equal value cases under the EPA.85 The Clerical Workers Union, who represented 30,000
members, 90% of them women, argued that their wage award was lower than awards for
comparable, male-dominated occupations, and thus was a “depressed female rate” in
78
At 19.
At 20.
80
Terranova, above n 6, at [86].
81
At [86].
82
Orr, above n 71, at 5.
83
(29 August 1972) 380 NZPD 2178.
84
At 2178.
85
New Zealand Clerical Administrative etc IAOW v Farmers Trading Co Ltd [1986] ACJ 203.
79
18
breach of the EPA.86 The decision to reject the Union’s case effectively closed the door on
pay equity under the EPA for some time. The Ministry of Women’s Affairs went so far as
to say that the EPA was now rendered redundant.87 Pay equity activists instead shifted their
focus, and began advocating for new comprehensive legislation.
B The Employment Equity Act 1990 and its Aftermath
The advocates were successful, and after a comprehensive report,88 the EEA was passed.
The EEA provided for pay equity, equal employment opportunities and the establishment
of an Employment Equity Office, with an Employment Equity Commissioner to oversee
the performance and enforcement of the EEA. Ten claims were lodged from groups
including practice nurses (to be compared to uniformed police), medical receptionists
(compared to hospital electrical workers) and cosmetic saleswomen (compared to autoparts salesmen).89 All alleged that their male counterparts earned around $100 more than
them per week.90 A gender-neutral job evaluation system was also developed.91
Regrettably, after only three months, the EEA was repealed by the incoming National
Government, as it conflicted with their policy for a less regulated labour market.92 Thus
pay equity, and any claims made under the EEA, were banished from the political agenda.
National then introduced the Employment Contracts Act 1991, which transformed the
employment landscape from the old awards system to one dominated by individual
employment agreements.93
This move has made the implementation of any future pay equity policy far more
complicated. Under the awards system, pay equity comparisons would have been
reasonably straightforward between the easily accessible awards of female- and male-
86
Linda Hill “Equal pay for equal value: The case for care workers” (2013) 27(2) Women’s Studies Journal
14 at 16.
87
Ministry of Women’s Affairs Report on the Effectiveness of the Equal Pay Act 1972 (September 1994) at
19.
88
Margaret Wilson Towards Employment Equity: Report of the Working Group on Equal Employment
Opportunities and Equal Pay (Working Group on Equal Opportunities and Equal Pay, 1988).
89
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for work
of equal value, above n 32, at 33.
90
At 33.
91
At 36.
92
Lisa Davies and Natalie Jackson Women's Labour Force Participation in New Zealand: The Past 100
Years (paper prepared for the Population Studies Centre, University of Waikato, 1993) at 14.
93
Hill, “Equal pay for equal value: The case for care workers”, above n 86, at 17.
19
dominated occupations.94 In the age of individual employment contracts, there is much less
transparency, and job comparisons have become much more complex.95
In addition, under the Employment Contracts Act 1991, union membership became noncompulsory and membership plummeted, especially among women.96 As Prue Hyman
notes, studies have shown that “[h]igh levels of female unionisation and centralised
bargaining are strongly associated in cross-country comparisons with a lower gender pay
gap and lower differentials generally.”97 Lower union membership meant that collective
bargaining efforts were weakened, and any attempt from unions to bargain for pay equity
was very difficult.98 There was some success using equity type arguments by the Nurses
Union and by midwives, but these were limited and hard won.99
In 2003, the Government decided to try address pay equity through policy, rather than
through legal means. The Taskforce on Pay & Employment Equity in the Public Service,
Public Education and Public Health was formed, which lead to the development of the Pay
and Employment Equity Unit under the Department of Labour.100 Under this unit, extensive
pay equity assessments were carried out in the public sector, which uncovered the
undervaluation of social workers and special education support workers.101 Unfortunately,
the abolition of the Pay and Employment Equity Unit by the incoming National
Government in 2009 and economic pressure prevented the undervaluation from being
addressed, thus the documented discriminatory pay rates were left in place.102 For this
reason, pay equity policies have been “criticised for developing into slow bureaucratic
processes”, and without the force of law, success depends wholly on “employers’
willingness to accept pay equity principles and negotiate.”103
C The Terranova Case
After the disbandment and failure of yet another pay equity initiative, the Service & Food
94
Celia Briar, “New Zealand Conference on Pay and Employment Equity for Women” (2004) 23 Social
Policy Journal of New Zealand 215 at 217.
95
Hill, “Equal pay for equal value: The case for care workers”, above n 86, at 17.
96
Prue Hyman “Is Active Intervention Still Needed to Improve the Position of Women in the New Zealand
Labour Market? If so, what can be done?” (2015) 11(1) Policy Quarterly 3 at 6-7.
97
At 7.
98
Hill, “Equal pay for equal value: The case for care workers”, above n 86, at 17.
99
Prue Hyman “All the way for Equal Pay” (2013) 19(8) Kai Tiaki: Nursing New Zealand 13 at 14.
100
Hyman “Pay Equity and Equal Employment Opportunity in New Zealand: Developments 2006/2008
and Evaluation”, above n 28, at 2.
101
Prue Hyman “Pay Equity and Equal Employment Opportunity in New Zealand: Developments
2008/2010 and Evaluation” (2010) 36(1) New Zealand Journal of Employment Relations 65 at 68.
102
Hill, “Equal pay for equal value: The case for care workers”, above n 86, at 18.
103
At 28-29.
20
Workers Union (SFWU), partly fuelled by the Human Rights Commission Inquiry Caring
Counts, deemed that in 2013 the time was right to bring a new pay equity test case under
the EPA.104 The case was spear headed by Kristine Bartlett, an aged care worker who
argued that her employer, Terranova Homes and Care, did not provide equal pay as
required under the EPA because aged care work is predominately performed by females,
and thus undervalued.105 SFWU applied under s 9 of the EPA for the Court’s interpretation
of the general principles for the implementation of equal pay.106
In the Court of Appeal, the main issue in contention was whether s 3(1)(b) provided for
pay equity type comparisons.107 After deeming the issue “finely balanced”, the Court of
Appeal confirmed the Employment Court’s finding that s 3(1)(b) does allow for equal pay
for work of equal value.108 The Court was quick to point out “that the Act is very poorly
worded…[t]he syntax is cumbersome and the drafting elliptical”109, and that the
“unfortunate reality is that it is simply not possible to read the Act as a carefully drafted
and well thought-out piece of legislation.”110
Justice French considered that the 1971 Commission report was too vague to help
determine the correct interpretation of the EPA, and that the arguments over the workability
of pay equity were overstated.111 She also found that the past interpretations were not
binding, and that the New Zealand Bill of Rights Act 1990 and international obligations
were of little help in identifying the correct interpretation of s 3(1)(b). Likewise, the
argument made by Terranova that the EPA was never intended to provide for pay equity,
hence the enactment of the EEA, was not considered to be determinative.112 Instead Justice
French placed the most emphasis on the scheme of the EPA itself, the language and the
purpose of the EPA, and confirmed that the Act provided for pay equity.113 The Supreme
Court upheld this decision.114
104
At 19.
Terranova, above n 6, at [2]-[6].
106
At [54].
107
At [65].
108
At [81].
109
At [83].
110
At [163].
111
At [95] and [172].
112
At [200].
113
At [147].
114
Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2014] NZSC
196.
105
21
The Court of Appeal then recommended that the case go back to the Employment Court to
determine the pay equity principles for the substantive case to be tried under, since the EPA
lacks any real guidelines.115
D Government Intervention
Before this could happen however, the Government intervened by setting up a working
group to develop principles for pay equity in New Zealand, taking the responsibility away
from the Employment Court and putting on hold the Union’s legal action.116 The Joint
Working Group was established in October 2015, and was made up of representatives from
the Government, unions and employer groups.117 The Terms of Reference defined their
task as being to “recommend principles to Government that provide practical guidance to
employers and employees in implementing pay equity.”118 However these
recommendations were required to be within the scope of the EPA and the Terranova
decision, and had to be consistent with the existing employment framework, which limited
their scope substantially.119
The Joint Working Group reported back in May 2016. The emphasis of its
recommendations were on good faith collective bargaining between the employee and
employer, within the scope of the Employment Relations Act 2000 (ERA), in order to
achieve pay equity.120 Where bargaining is unsuccessful, recourse may be had to the
Employment Relations Authority, who will be given the power to alter employment
agreements, including pay levels.121 For a claim to have merit, it must be found that the
work is predominately performed by females, and that it has been historically
undervalued.122 After that is determined, the principles state that a gender-neutral
evaluation must take place, but the recommendations are vague and do not give a procedure
for how this may be done.123 Frustratingly, the principles mimic the wording of s 3(1)(b)
of the EPA, continuing to use the confusing phrase “same or substantially similar” for
115
Terranova, above n 6, at [239].
Stacy Kirk and Sam Sachdeva “Government to address pay equity, care giver wages” Stuff (online ed,
New Zealand, 20 October 2015).
117
Paula Bennet and Michael Woodhouse “Pay equity meeting an important milestone” (17 November
2015) The official website of the New Zealand Government <www.beehiv.govt.nz>.
118
Joint Working Group on Pay Equity Principles “Terms of Reference” (17 November 2015) State
Services Commission <www.ssc.govt.nz/> at 1.
119
At 7.
120
Letter from Patsy Reddy (Crown Facilitator) and others to Paula Bennett (Minister of State Services)
and Michael Woodhouse (Minister for Workplace Relations and Safety) regarding Recommendations of the
Joint Working Group on Pay Equity Principles (24 May 2016) at 2.
121
At 3.
122
At Appendix 2, 1.
123
At Appendix 2, 2-3.
116
22
identifying comparators. No material guidance is given for how a pay equity claim may be
continued and resolved. These steps will involve amendments to both the ERA and the
EPA, although the recommendations do not clearly specify what these will be.124
This is a very different approach from the one taken in the EEA, which set up an
independent Employment Equity Commissioner who was responsible for responding to
pay equity claims and conducting pay equity assessments. It also does not follow the classic
model of most pay equity legislation, outlined in the Introduction. Employees must jump
through many more hoops, for example attempts at good faith bargaining, before any
assessment may be carried out. Although this focus on collective bargaining sounds like a
positive step to reduce costly and lengthy litigation while maintaining good faith
relationships, given “that collective bargaining over pay equity issues has not worked in
the past, it is somewhat optimistic to accept it will work in the future.”125
Furthermore, the recommendations regrettably give no detail on how a pay equity
determination will be carried out by the Authority; specifically, no information is included
on how comparators will be identified and assessed. Also, due to the limited Terms of
Reference, recommendations only involve amendments to existing legislation, including
the EPA, which even Workplace Relations and Safety Minister Michael Woodhouse
admitted was “certainly not…fit for purpose.”126
This means that instead of recommending the enactment of clear, purpose built legislation
for the implementation of pay equity, the report would have the EPA be the main
instrument. As has already been established, the EPA is an archaic, confusing and poorly
written statute with a contentious history. It is unclear whether the EPA was designed with
pay equity in mind; there has been no consensus over what it stands for; and until
Terranova, it had lain dormant for nearly 30 years. Moreover, it was enacted in a
completely different environment of labour relations, and mainly aimed at the 1972-77
implementation period. The EPA has played an invaluable role in reinvigorating the pay
equity debate, but it is not an ideal instrument for the execution of pay equity in the future.
Currently, the Government is considering the Joint Working Group’s recommendations,
with Michael Woodhouse stating, “it’s important we take the time to get it right.”127 It is
unclear what the Government intends to do at present and what the future of pay equity in
124
At 3.
Roth, above n 7, at 5.
126
Kirk and Sachdeva, above n 116.
127
Paula Bennet and Michael Woodhouse “Pay equity working group reports back” (7 June 2016) The
official website of the New Zealand Government <www.beehiv.govt.nz>.
125
23
New Zealand may look like. The Union E Tū has suggested that it “would be a brave
government that rejected the working group’s recommendations or tried to meddle, given
it represents a rare meeting of the minds of business, unions and government officials.”128
However Professor Paul Roth has suggested that this may all be “just another delay in the
way of paying a fair wage to…New Zealand's lowest-paid workers.”129
Overseas commentators have noted that in a decentralised labour market, government
policies, such as the Pay and Employment Equity Unit, and complaints-based pay equity
legislation are at risk of being ineffective.130 Rather, what is needed to secure results is proactive, purpose built legislation which will tackle the undervaluation of women’s work
head-on.131 It is clear that in New Zealand, pay equity policy and collective bargaining has
failed to achieve results. It remains to be seen whether the proposed changes to the EPA
will be enacted, let alone effective.
E Summary
New Zealand is at a crossroad. Depending on Government action, it is possible that in wake
of Terranova, New Zealand now has pay equity legislation in the form of the EPA.
However, it is equally possible that action will be taken to halt progress, as has happened
time and time again, so that pay equity is exiled into the political backwaters once more.
While Chapter Three will substantively argue why pay equity should be implemented, this
chapter contends that New Zealand needs to learn from its past mistakes when looking to
the future. Pay equity has failed to gain a foothold thus far in New Zealand, due to illplanned and poorly drafted legislation, political reluctance, insubstantial government
policy and a decentralised labour market which has made collective bargaining difficult.
Recent recommendations contend that the EPA should continue to be used and revamped
to provide more directly for pay equity. Although this would be an improvement on the
status quo, this chapter has argued that the EPA is ill equipped to deal with the complexities
of pay equity. Therefore in order to give pay equity in New Zealand the best chance of
success, comprehensive new legislation would be the best option.
128
Jonathan Underhill “Unions and business come together in a fair pay plan” New Zealand Listener
(online ed, New Zealand, 7 July 2016).
129
Eileen Goodwin “Recommendation over pay may just be ‘delay’” Otago Daily Times (online ed,
Dunedin, 9 June 2016).
130
Mary Cornish “Securing Pay Equity for Women’s Work – Everyone Benefits – The International
Experience” (paper presented to the
International Seminar, Equal Pay for Work of Equal Value, convened
by the ILO Southern Cone Sub-regional Office, Santiago, Chile, August 25 2008) at 10.
131
At 10.
24
IV Chapter Three - Should New Zealand have Pay Equity?
The laws of supply and demand are just the accumulation of all the interventions into
the market place. To argue that equal pay for comparable worth disrupts this system
is just displaced hysteria about the role of women…Any economist will argue that
discrimination in wages is not economically efficient, so pay equity laws are only one
more measure to make the economy more efficient, and simultaneously to give women
monetary recognition for the work they perform.
-
H. Hartman, Economist, National Academy of Sciences, Washington, D.C132
Thanks to the decision of Terranova, pay equity is back on the political agenda in New
Zealand. However, the future of pay equity is far from secure. As a controversial and
complex issue, it has attracted much debate, and has both advocates and critics. This
chapter debunks the common arguments made against pay equity, as well as offering
arguments in its support, consequently concluding that New Zealand should have pay
equity legislation.
A Arguments Against Pay Equity
New Zealand’s labour market is one of the least regulated in the world.133 Consequently,
negative reactions to intervention in the market in the form of pay equity are to be expected.
Business New Zealand for example, in its role as intervener in Service and Food Workers
Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd,134 had many concerns about
the feasibility of pay equity, and submitted that it would be “unworkable and unduly
onerous on employers”, as well as inconsistent with New Zealand’s current labour
market.135 To get a laypersons point of view, one only has to look at the comments on pay
equity articles on the New Zealand Herald website, which are resoundingly negative and
uninformed.136 One commenter called aged care workers “glorified babysitters”, while
another termed pay equity “a slippery slope to communism.”137 Overseas, pay equity has
also faced considerable resistance, with one American commentator calling it “the looniest
132
Coalition for Equal Value Equal Pay “Submission to the Working Party on Employment Equity”
(December 1990) at 1.
133
Hyman “Is Active Intervention Still Needed to Improve the Position of Women in the New Zealand
Labour Market? If so, what can be done?”, above n 96, at 7.
134
Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd [2013]
NZEmpC 157, [2013] ERNZ 504.
135
Hill, “Equal pay for equal value: The case for care workers”, above n 86, at 24-25.
136
See Prue Hyman “Equal pay – the case for action now” New Zealand Herald (online ed, New Zealand,
9 February 2016); and Catriona MacLennan, Vicky Mee and Judy McGregor “Opinion: NZ should legislate
to promote pay equality” New Zealand Herald (online ed, New Zealand, 10 June 2016).
137
Hyman “Equal pay – the case for action now”, above n 136.
25
idea since Looney Tunes.”138 However, most arguments levelled against pay equity are
overstated and misguided. As Helen Remick has noted, often:139
Each of these arguments rests on a powerful truism as well as on a distorted
understanding of both the measurement of wage discrimination and of eliminating it
through the implementation of a comparable worth policy.
1 Free Market Ideology
(a) The critics
The free market is often cited by sceptics as an argument against pay equity. The basic
contention is that an unregulated labour market is theoretically free from all discrimination,
as the wage of workers is determined by supply and demand, and a worker’s
productivity.140 Moreover any discrimination that does exist (due to government regulation
and trade union action) will be eroded by the workings of the free market itself, as
employers are motivated to achieve optimal productivity, which is hindered by
discrimination.141 This is backed by the assumption that the free market is the most
legitimate way to determine wages, and the most efficient.142 The more regulated a market
is, the less productive it will be in allocating resources.143
It is claimed that pay equity will disrupt this type of free market wage system, and that
“[g]overnment intervention will sabotage the invisible hand.”144 Not only does pay equity
place restrictions on the labour market to make it less efficient, it also seeks to replace its
role in setting wages. Many sceptics take issue with the fact that pay equity seeks to adjust
wages to bring them up to their perceived intrinsic ‘value’ via the process of job
evaluation.145 Rather they argue that the value of a job, and thus its wages, should be
determined by the market forces of supply and demand.146 This search for a ‘just price’
138
McCann, above n 50, at 32.
Helen Remick and Ronnie J. Steinberg “Technical Possibilities and Political Realities: Concluding
Remarks” in Helen Remick (ed) Comparable Worth and Wage Discrimination: Technical Possibilities and
Political Realities (Temple University Press, Philadelphia, 1984) at 288.
140
Novitz and Jaber, above n 37, at 252.
141
Catherine Holst “Institutional Variation and Normative Theory: Lessons from a Local Equal Pay
Controversy” in Fredrik Engelstad and Anniken Hagelund (ed) Cooperation and Conflict the Nordic Way:
Work, Welfare, and Institutional Change in Scandinavia (De Gruyter, Warsaw, 2015) at 120.
142
Remick and Steinberg, above n 139, at 289.
143
Holst, above n 141, at 121.
144
Remick and Steinberg, above n 139, at 289. The “invisible hand” is a metaphor used to describe free
market forces.
145
Penelope Brook The Inequity of ‘Pay Equity’: Comparable Worth Policy in New Zealand (The New
Zealand Centre for Independent Studies, Auckland, 1990) at 10.
146
Gunderson Comparable Worth and Gender Discrimination: An International Perspective, above n 12, at
25.
139
26
based on intrinsic value is described by some as a chimera, and as “the intellectual black
hole at the centre of comparable worth.”147 It is argued that there is no such thing as the
intrinsic value of work, as value is derived from the perception of skill, which in turn is
derived from utility, which is determined by market forces of supply and demand.148 An
example cited by Michael Levin is that of an arrow-catcher, who can throw arrows into the
air and catch them with their teeth.149 Although it may be a job that requires a lot of skill
and training, there is no demand for it, as no one wants to hire a relatively useless arrowcatcher, thus though skilful, and perhaps with intrinsic value, the occupation is worthless.150
It is contended therefore that pay equity is “a frontal assault on any form of economic
liberty.”151
(b) Response
A key error in the free market arguments made against pay equity is the assumption that
the market operates in a neutral and fair way. Rather, as was shown in Chapter One, the
market absorbs and reflects societal and cultural norms, resulting in artificially depressed
rates of pay for women’s work, embedded in pay structures.152 This means that the ‘market
rate’ for predominately female jobs often results in discriminatory pay.153 Supply and
demand are likewise not immune to influence, and are also affected by gender power
relations, which result in lower pay for female-dominated occupations.154 Contrary to the
claims of neoclassical economics, the market “is not independent of the values and customs
of those who participate in it.”155 Thus instead of distorting the labour market as claimed
by critics, pay equity seeks to rectify it and to even the playing field.
A further erroneous assumption is that a free, unregulated market will produce the best
outcome. In an article titled “Why a Free Market Wage System Doesn’t Work”, Michael
Sharp argues that in New Zealand, the current decentralised labour market is inefficient
and that this inefficiency has caused a massive increase in the income gap between the rich
and poor since the removal of broad based collective bargaining in the 1990s.156 This is
because the current market system is based on a neoclassical economic model which
147
Michael Levin “The Feminist Road to Socialism” (1984) 78(3) Commentary 13 at 16.
Brook, above n 145, at 10.
149
Levin, above n 147, at 16.
150
At 16.
151
At 17.
152
Rubery, above n 3, at 2.
153
Chicha, above n 47, at 7.
154
Steinmetz, above n 16, at 43.
155
Novitz and Jaber, above n 37, at 254.
156
Michael Sharp “Why a Free Market Wage System Doesn’t Work” (5 March 2015) Briefing Papers
<www.briefingpapers.co.nz>.
148
27
requires unrealistic “perfect market conditions… that rarely exist.”157 The same conclusion
is echoed in international research, where it has been found that high levels of centralised
bargaining and government intervention in the labour market actually result in a smaller
wage differential and a lower gender pay gap.158
Finally, critics misunderstand the central aim of pay equity wage adjustments. Job
evaluations are not seeking to attach a dollar value to certain skills and occupations. Rather
the aim is to lift the artificially reduced price of predominately female occupations to match
the market rate of male jobs deemed to be comparable via job evaluation. The pay for
predominately male jobs is determined by market forces, but unlike female-dominated
occupations, male jobs are not negatively affected by discriminatory societal and cultural
norms resulting in undervaluation.159 Thus job evaluation ensures that both female- and
male-dominated jobs are paid on the same basis. This refutes arguments based on the
impossibility of finding the intrinsic ‘value’ of jobs as irrelevant, as wages for femaledominated occupations are set by market forces, albeit indirectly through comparison with
male-dominated occupations.
2 Flaws in Job Evaluation Systems
Job evaluation is almost always a crucial step in pay equity assessments, used at both the
assessment and remedial stage. Once it has been determined that a female-dominated
occupation has been affected by systemic undervaluation, the next step is to use a genderneutral job evaluation tool to establish a non-discriminatory wage rate based on a
comparable male-dominated occupation.160 Job evaluation tools must therefore develop a
way of accurately comparing different occupations to assess whether they require similar
skills, training, experience, responsibilities and conditions.161 This is often done by a points
system, where these factors are awarded different scores depending on how ‘valuable’ the
job is assessed to be.162 Occupations with the same, or similar total of points are found to
be comparable for the purposes of pay equity. This process is made up of four distinct
steps:163
157
Sharp, above n 156.
Hyman “Is Active Intervention Still Needed to Improve the Position of Women in the New Zealand
Labour Market? If so, what can be done?”, above n 96, at 7.
159
Armstrong, above n 9, at 4.
160
Brook, above n 145, at 12.
161
McCann, above n 50, at 28.
162
Levin, above n 147, at 14.
163
Pay and Employment Equity Unit Gender Bias in Job Evaluation: A Resource Collection (Department
of Labour, April 2008) at 32.
158
28
•
the accurate collection of job information; •
deciding on the mechanism or tool to determine how the value will attach to
the job information; •
applying the mechanism to determine the value of the work performed; and •
making the comparisons (evaluations). (a) The critics
As critics are keen to point out, there are concerns about job evaluation systems. They are
unavoidably subjective, procedurally complicated, and, if not done properly, can fail to
remove gender bias. Moreover, some argue that the overall goal of job evaluation for the
purposes of pay equity, to find comparable male- and female-dominated occupations, is
inherently flawed and impossible.
One of the biggest criticisms levelled at job evaluation systems is that there is no ‘correct’
or universally agreed upon job evaluation system. Job evaluation tools differ greatly from
one another, in both complexity and measurement of job worth, so that even experts
disagree as to what system and criteria to use.164 Although the same type of factors (skills,
training, experience, responsibilities and work conditions) are used universally, the
weighting and assignment of points to these factors varies depending on what job
evaluation tool is being used.165 These tools have to determine how to weigh years of
education against levels of responsibility, and to determine skill points for completely
different occupations, such as librarians versus police officers. There is no right or wrong
answer to these decision, consequently a level of subjectivity is unavoidable. Thus job
evaluation cannot be seen as a rational science, as it is not possible to objectively determine
the value of jobs. Critics argue that this subjectivity makes many job evaluation schemes
“arbitrary and unreliable”, as the same job could be rated differently under different
schemes.166
Job evaluation schemes can also be extremely complicated, expensive and lengthy. They
require the collection of a lot of job information, as well as experts to compile and assess
164
McCann, above n 50, at 32.
June Ellenoff O'Neill “The Concise Encyclopedia of Economics: Comparable Worth” (2002) Library of
Economics and Liberty <www.econlib.org/>.
166
McCann, above n 50, at 32.
165
29
the data.167 This added cost and difficultly was recognised by the Joint Working Group on
Pay Equity in their recommendations, who commented that lack of resources could hinder
parties wishing to raise a claim, and impact the success of a pay equity assessment.168
At the end of an evaluation, there is a danger that some gender bias will persist. Many job
evaluation systems were first designed in the 1930s as a tool to determine pay structures
within male-dominated firms.169 Some of these original systems have not been adequately
re-evaluated since women joined the work force, and serve to preserve and validate the
status quo and existing gender bias, by not according weight to specific skills found in
women’s work.170 Gender bias can also been found in the implementation stages and design
of job evaluation tools.171 Even in schemes which claim to be gender-neutral, there is a risk
that innate female skills (such as those discussed in Chapter One) will continue to be
overlooked and undervalued.172
Conversely, other critics such as Maeve Quaid have argued there is a danger that genderneutral job evaluation tools are prejudiced, and place too much emphasis on aspects of
female jobs.173 This results in “cooking the books”, which manipulates the weighting of
factors in favour of women so that “the technique will ‘automatically’ yield higher scores
for those occupations normally held by ‘marginalized’ women.”174 She argues that job
“evaluation does not evaluate. Rather, job evaluation must be seen as a device that disguises
cultural values and political action within the context of a rational technique.”175
At a more fundamental level, some critics also challenge the end goal of job evaluation –
finding comparable occupations. They say that comparing male and female occupations is
akin to comparing apples and oranges, in that they are too dissimilar to find truly
comparable qualities.176 Thus critics argue that the “entire logic of job evaluation itself is
erroneous.”177
167
Judith A McDonald and Robert J Thornton “Comparable Worth/Work of Equal Value” in Nancy A
Naples (ed) The Wiley Blackwell Encyclopedia of Gender and Sexuality Studies (Wiley Blackwell, 2016) at
349.
168
Reddy, above n 120, at 4.
169
Chicha, above n 47, at 6.
170
Chicha, above n 47, at 6.
171
Maeve Quaid The Myth of Equitable Job Evaluation (University of Toronto Press, Toronto, 1993) at 72.
172
Chicha, above n 47, at 6.
173
Quaid, above n 171, at 49.
174
At 49.
175
At 76.
176
Remick and Steinberg, above n 139, at 288.
177
McCann, above n 50, at 32.
30
(b) Response
Even though job evaluation schemes are an imperfect tool, this does not mean they are
useless for the purposes of pay equity assessments. Although they are unavoidably
subjective, a job assessment scheme does provide a consistent way to analyse different jobs
using the same criteria. Such evaluations also have the benefit of being transparent, so that
all parties are aware of how and why an occupation is rated.178 Thus job evaluations are an
improvement on market forces determining wages, which are obscure and not open to
scrutiny. Job evaluations are necessarily a “more political and institutional process” but
this is appropriate given that labour is not merely a commodity but is also the “means by
which people are able to sustain themselves and their families.”179 Furthermore, although
job evaluation tools do differ in criteria, they have consistently found women’s jobs to be
undervalued when compared to similarly scoring male-dominated jobs.180 Even Maeve
Quaid, who is highly critical of job evaluations as a rational science, admits that for the
purposes of pay equity, “job evaluation itself, as a technique does not achieve change, but,
rather, is a vehicle through which desired change can be achieved.”181
It is also important to emphasise that job evaluation comparisons do not automatically
result in women’s wages being increased to match those of their male comparator. Instead
the male wage rate is often used as a starting point for ongoing discussion between the
parties to negotiate an adequate new wage rate.182 Job evaluation results are used as an
indication, not as a definitive answer, therefore the fact that they are not always consistent
is not a deal breaker.
There are also many resources available to parties to help them carry out gender-neutral
job evaluations. Both the ILO and the New Zealand Government have produced resources
and step-by-step guides for implementing gender-neutral job evaluations.183 Although it is
accepted that not all job evaluation techniques will succeed in removing all aspects of
gender bias, they at least strive to reduce gender discrimination and are a substantial
improvement on older job evaluation systems.184 It is unfortunately unavoidable that job
evaluations will take time and come at some expense, but this burden can be minimised by
178
Prue Hyman “Equal pay for work of equal value – job evaluation issues” (1988) 13 New Zealand
journal of industrial relations 237 at 241.
179
Rubery, above n 3, at 2.
180
Hyman “Equal pay for work of equal value – job evaluation issues”, above n 178, at 241.
181
Quaid, above n 171, at 78.
182
McCann, above n 50, at 31.
183
See Marie-Thérèse Chicha Promoting equity: Gender-neutral job evaluation for equal pay: A step-bystep guide (International Labour Organisation, 2008) and Pay and Employment Equity Unit Gender Bias in
Job Evaluation: A Resource Collection, above n 163.
184
Novitz and Jaber, above n 37, at 258.
31
government support and resources. For example, both Sweden and Quebec, Canada have
a specialised body to provide technical support for pay equity claims.185 In New Zealand,
such a body could look like the Employment Equity Office that was to be established under
the EEA.186
Critics who allege that the goal of pay equity to compare male- and female-dominated
occupations is invalid are ignoring the fact that the practice of comparing different
occupations through job evaluation is already widespread in both public and private sectors
in New Zealand.187 As Helen Remick points out:188
It is surprising, then, that the same employer groups that have supported job evaluation
systems when they have been used to create and justify an existing organisational
hierarchy and wage structure contend that such systems cannot be used to compare
male-dominated and female-dominated jobs within that wage structure.
3 Workability Concerns
(a) The critics
The implementation of pay equity is inevitably complex. Some opponents therefore
challenge the workability of pay equity as a whole, and argue that it is too expensive and
will actually result in higher rates of unemployment for women.189 Aside from the various
implementation costs of pay equity, critics contend that the overall cost of pay adjustments
for employers is unsustainable and unfair, and will negatively affect the whole economy.190
Looking at a concrete example in New Zealand, it was alleged during the Court of Appeal
case that Terranova should not have to “shoulder the burden of rectifying society-wide
structural discrimination.”191 Moreover, the New Zealand Aged Care Association has
commented that even though their members would like to pay carers more, they are
“hamstrung” by the lack of Government funding, and thus are unable to do anything unless
the Government acts first.192 They say that if they were to pay carers more, then costs would
185
Chicha, above n 47, at 26.
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 36.
187
Novitz and Jaber, above n 37, at 257.
188
Remick and Steinberg, above n 139, at 289.
189
Ministry of Women’s Affairs Report on public submissions to Next Step Towards Pay Equity: A
Discussion Document (May 2003) at 10.
190
Marie Dwyer “The Economic Rationales for Narrowing the Gender Gap” (paper presented to the
National Advisory Council on the Employment of Women, June 2016) at 25.
191
Terranova, above n 6, at [149].
192
New Zealand Aged Care Association “Equal Pay Case” <www.nzaca.org.nz/>.
186
32
rise, and their services would become unaffordable for consumers, who pay for most aged
care through government subsidies.193 The New Zealand Aged Care Association allege that
a wage rise from $15.30 to $26.00 an hour would result in needing an additional $500
million annually to fund the sector, an amount that they argue is unsustainable and would
result in homes going out of business.194 The Health Minister Jonathan Coleman has
declined to accept any responsibility, and has replied that “providers must decide how they
allocate their money.”195 Many female-dominated occupations are either directly or
indirectly funded by government agencies, such as those that can be found in the health,
care and education sectors.196 Therefore it is the Government who will bear a large
proportion of the costs associated with wage adjustments in order to fund adequate wages
for undervalued women’s work.197
Critics also argue that pay equity will actually cause the unemployment of women working
in predominately female jobs. This is because employers who are forced to pay their
employees non-discriminatory rates will be unable to afford the same number of workers,
and so will have to employ fewer staff.198 It is also hypothesised that higher wages could
attract more skilled men to the jobs, who would take the jobs of less skilled women.199
Additionally, critics allege that the high cost of implementing pay equity would result in
inflation and a rise in consumer prices, and be bad for the economy in general.200
(b) Response
Although unmanageable costs and unemployment seem like very serious drawbacks of
implementing pay equity, they are over stated and there is little evidence to back up the
contentions. Similar arguments were made before the implementation of both the EEA and
the EPA.201 Although the EEA did not last long enough to implement any pay equity
assessments, it has been noted that the introduction of the EPA and its implementation of
equal pay over five years did not have any catastrophic long term effect on the economy.202
Between 1972 and 1977, there was a gender wage gap narrowing of 7-10%, which resulted
in an 6.8% wage bill increase, but only contributed to a 3% increase to the consumer price
193
New Zealand Aged Care Association, above n 192.
New Zealand Aged Care Association, above n 192.
195
Hyman “Is Active Intervention Still Needed to Improve the Position of Women in the New Zealand
Labour Market? If so, what can be done?”, above n 96, at 9.
196
Dwyer, above n 190, at 26.
197
At 26.
198
Brook, above n 145, at 15.
199
O’Niell, above n 165.
200
McCann, above n 50, at 35.
201
Wilson, above n 88, at 13.
202
At 13.
194
33
index during that time.203 Similarly, the implementation of any pay equity measure would
not happen overnight, as has been assumed by critics.204 If done in stages, pay equity
processes should not have the dire effects of high inflation and unemployment prophesised
by its opponents.205
Further, studies on the implementation of pay equity policies overseas have shown them to
be manageable, with no significant negative short or long term costs.206 In New South
Wales, it was found that the introduction of pay equity resulted in minor short term
decreases in national GDP and employment, but a rise over the long term.207 Further,
studies in Ontario, Canada also suggest that there will be no dire consequences following
the implementation of pay equity. In Ontario, the increase in the total private sector wage
bill was only 0.5%, and 2.2% in the public sector.208 As Jill Rubery points out, economic
arguments can be turned on their head, as arguably pay equity, by paying women an
adequate wage rate, will improve productivity, as well as the quality of the work being
done.209
Finally, the fact that pay equity may cost money is not a good enough reason to deter action
and accept the undervaluation of women’s work. As it was so eloquently put by Judge
Christina Inglis in the Employment Court:210
History is redolent with examples of strongly voiced concerns about the
implementation of anti-discrimination initiatives on the basis that they will spell
financial and social ruin, but which prove to be misplaced or have been acceptable as
the short term price of the longer term social good. The abolition of slavery is an old
example, and the prohibition on discrimination in employment based on sex is both a
recent and particularly apposite example.
4 It’s a Matter of Choice
(a) The critics
Many opponents of pay equity still argue that the gender wage gap does not really exist, or
that it is vastly exaggerated, and that women’s work is not actually undervalued. They
203
At 13.
Remick and Steinberg, above n 139, at 290.
205
At 292.
206
Dwyer, above n 190, at 25.
207
At 25.
208
Chicha, above n 47, at 41.
209
Rubery, above n 3, at 18-19.
210
Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd, above n 134, at
[110].
204
34
contend that women are free to choose where to work and that lower wages in femaledominated occupations are justified by the choices that women make.211 Critics argue that
women pick work which will give them more flexibility and that require less skill, and thus
are paid less for this trade off.212 Women are equally free to decide to work in higher paid
male or mixed jobs, but instead prefer less demanding jobs which are “mother-friendly”
and that will allow women to combine work with motherhood.213 The New Zealand
Business Roundtable used this kind of argument when justifying why predominately
female jobs have lower pay, as it “simply reflects women’s job preferences, and men and
women’s generally differing approaches to paid work.”214
(b) Response
The above simplistic and antiquated view ignores the realities of the current labour market
and the aims of pay equity. Pay equity seeks to overcome the undervaluation of occupations
based on job requirements; it is not based on the behaviour of the people who commonly
occupy that job, which is what the critics focus on.215 They argue that women flock to
certain jobs because they are seen to be advantageous and to provide good working
conditions that are suitable for raising a family. They rationalise that these jobs are paid
less because they provide these compensating advantages. This ignores the evidence
presented in Chapter One. It is in fact these incorrect assumptions, sourced in social and
historic norms, which caused the initial undervaluation of female-dominated occupations.
Institutional inertia has frozen the relative pay rate so that these gender stereotypes are still
present in pay structures today.216
Furthermore, the allegation that women are completely free to choose where to work and
that they prefer low-paid women’s work is overly simplistic. Women are constrained, not
only by social expectations and cultural gender stereotypes, but also by the labour market’s
preference for employing men.217 The crowding theory discussed in Chapter One supports
this idea; as women’s options are limited, they are forced into fewer and lower paid
211
Brook, above n 145, at 6.
McCann, above n 50, at 33.
213
England and others, above n 51, at 6.
214
Ministry of Women’s Affairs Report on public submissions to Next Step Towards Pay Equity: A
Discussion Document, above n 189, at 12.
215
Armstrong, above n 9, at 4.
216
England and others, above n 51, at 29-30.
217
Megan Gerecke A policy mix for gender equality? Lessons from high-income countries (International
Labour Organisation, 2013) at 25.
212
35
occupations. This is compounded by the fact that few men want to do women’s work, due
to its low pay.218
Critics also incorrectly assume that women choose these jobs because they are happy to
earn less money, which completely ignores the history of women struggling for better pay
and working conditions.219 Female-dominated occupations represent essential labour in the
community, be it aged care work, nursing or childcare.220 Women should therefore not be
penalised for carrying out these jobs merely because a distorted market has failed to
accurately account for their value.221
B
Arguments in Favour of Pay Equity
As critical legal scholar Michael McCann has argued, law in “its official guise, surely is a
force that sustains hierarchical order, but…it can be, in the hands of defiant citizens, a
source of disorder and egalitarian reordering.”222 Pay equity is one such law that if
harnessed correctly, will result in benefits for many members of society and greater
equality in the labour market. However it is important to emphasise that pay equity is not
the answer to all wage inequity but rather is “a prescription for a specific illness that has to
do with certain jobs being undervalued.”223 Many advocates of pay equity argue that it is
just one of a number of strategies that need to be implemented to achieve equality for
women in the labour market, but this does not mean that “it is dismissible because it does
not do everything.”224
1 It’s a Matter of Justice and Fairness
A strong argument in favour of pay equity is that it should be implemented as a basic social
justice concern. It is not fair or just that an occupation is paid less because it is dominated
by one sex. Society needs to recognise the valuable skills involved in women’s work, and
rectify discriminatory underpayment by giving women fair remuneration.225 Many
predominately female jobs have substantial social and economic importance which should
be adequately reflected in their wage rate.226 Pay is often seen as an indication of status and
218
Armstrong, above n 9, at 4-5.
At 4-5.
220
Claudia Mills “Paying Women What They Are Worth” in Claudia Mills (ed) Values & Public Policy
(Harcourt Brace Jovanovich College Pub, 1992) at 386.
221
At 386.
222
McCann, above n 50, at ix.
223
Novitz and Jaber, above n 37, at 259.
224
At 260.
225
Holst, above n 141, at 121-122.
226
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 4.
219
36
is closely related to a person’s sense of self-worth, therefore accurately recognising the
worth of women and their contributions is a key step in recognising the equal status of
women in modern day New Zealand society.227 Pay equity also represents a step in the
right direction towards achieving greater gender equality.
Some supporters even go so far as to view equal pay for work of equal value as an essential
human right.228 The concept of pay equity was first recognised in 1919 in article 427 of the
Treaty of Versailles, which established the ILO and founded its core constitution.229 Since
then, pay equity has been recognised in several other international treaties, which seek to
establish it as a fundamental human right (this will be discussed in the New Zealand context
in more depth below). Mary Cornish, Chair of the Ontario Equal Pay Coalition, has argued
that rights rhetoric for pay equity is crucial in order to establish its status as non-negotiable
and “essential for human dignity and respect.”230 In addition, seeing equitable pay as a
human right means that there is potential to develop a similar scheme for other types of
occupational segregation, for example racial minorities, who have also been shown to
experience lower pay.
2 Decreased Inequality is Better for Everyone
(a) Better for women and their families
Higher wages for women as a result of pay equity have many positive implications for both
them and their loved ones, especially in lower socioeconomic families. Overseas, pay
equity outcomes have resulted in pay increases of up to 15% or more.231 Greater pay
promotes financial security and independence, and leads to women having more autonomy
in their life choices.232 It also decreases the risk of poverty, especially for households with
a single mother, and reduces the pressure to work multiple jobs.233 Long term benefits
include less dependence on social benefits, as well as improving retirement incomes, which
reduces poverty among older women.234
227
Holst, above n 141, at 121-122.
Martin Oelz, Shauna Olney and Manuela Tomei Equal Pay: An Introductory Guide (International
Labour Organisation, Geneva, 2013) at 2.
229
At 2.
230
Cornish, above n 130, at 5.
231
Chicha, above n 47, at 44.
232
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 3.
233
Oelz, Olney and Tomei, above n 228, at 4.
234
Chicha, above n 47, at 44.
228
37
The Ministry of Woman’s Affairs predicts that pay equity would be especially beneficial
to Māori and Pacific women, who have the lowest hourly earnings and annual incomes.235
This is due in part to the fact that Māori and Pacific women experience higher proportions
of occupational segregation in low paying female jobs.236 Māori and Pacific women would
therefore greatly benefit from pay equity assessments which resulted in pay increases for
female-dominated occupations.237 As the Ministry has acknowledged, the “personal
earnings of Māori women are of vital importance not only to whānau, hapū and iwi, but to
New Zealand’s aspirations of building a more inclusive society.”238
Additionally, there is clear evidence from Canada that pay equity is instrumental in helping
women obtain significant wage adjustments. Professor Pat Armstrong, an expert on pay
equity in Canada, argues that pay equity is worth it because it works, and it has resulted in
better pay for many women.239 In Quebec for example, a “2006 pay equity settlement gave
327,000 Quebec Government workers substantial pay adjustments and $1.5 billion in back
pay.” 240 Ontario has experienced similar successes, with wage increases for women
working in nursing homes and child care centres.241 However it is important to note that
these victories did not come easy, and that there are still high levels of non-compliance
with the pro-active pay equity legislation in both Quebec and Ontario.242 Nonetheless there
is a lot that New Zealand can learn about pay equity by following the example set by
Canada.
(b) Better for employers and the economy
It has also been shown that employers and the economy also benefit from pay equity. Such
benefits include greater job satisfaction from employees, higher productivity, and reduced
absenteeism.243 Furthermore, employers who implement pay equity become more
competitive in the market, as they offer fair rates of remuneration and increase their
reputation and attractiveness by being employers who comply with modern social and legal
standards.244 A survey carried out in Ontario found that 65% of organisations which had
implemented pay equity were seeing positive effects from it, as there was an improved
235
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 22.
236
At 28.
237
At 28.
238
At 25.
239
Armstrong, above n 9, at 6.
240
Cornish, above n 130, at 8.
241
At 8.
242
At 8.
243
Chicha, above n 47, at 44.
244
At 47.
38
work environment and better understanding of job content.245 The overall economy also
benefits from increased productivity and better efficiency once discrimination is removed,
as there is a maximisation of human capital.246 A research report carried out by Goldman
Sachs in 2011 also found that the equalising of male and female labour participation would
benefit the New Zealand economy and improve GDP by 10%.247
3 International Obligations
A further argument for why New Zealand should have pay equity is to meet its international
obligations in both human and employment rights. Both the ILO Convention 100 and the
United Nations Convention on the Elimination of (All Forms of) Discrimination against
Women (CEDAW)248 have been signed and ratified by New Zealand.249 Both require the
implementation of equal pay for work of equal value, and both are currently being
contravened by New Zealand.250 New Zealand was called on by the CEDAW committee
in 2012 to actively enforce pay equity through legislation in order to meet its international
obligations.251 Despite this, the Government remained inactive until the advent of
Terranova. It is argued therefore that New Zealand should enact legislation for pay equity,
so that its domestic law is in line with its international obligations. If not, then it is alleged
that New Zealand will lose its status as a global leader in both human rights and gender
equality.252
C Summary
Pay equity is a contentious and complex policy, however this does not make it unworthy
of implementing. As this chapter has shown, many of the criticisms aimed at pay equity
are exaggerated, are not backed up by evidence, or are based on a misunderstanding of pay
equity itself. It is understandable that market intervention will be met with resistance,
however this fear should not allow the undervaluation of women’s work to be continued.
245
Armstrong, above n 9, at 6.
Cornish, above n 130, at 6.
247
Philip Borkin Closing the Gender Gap: Plenty of Potential Economic Upside (Goldman Sachs, August
2011) at 1.
248
United Nations Convention on the Elimination of (All Forms of) Discrimination against Women 1249
UNTS 13(opened for signature 18 December 1979, entered into force 3 September 1981), art 11.
249
CEVEP “UN Coventions” (24 September 2013) CEVEP – campaign for equal value equal pay
<www.cevepnz.org.nz/>.
250
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on equal pay for
work of equal value, above n 32, at 31.
251
Hyman “Is Active Intervention Still Needed to Improve the Position of Women in the New Zealand
Labour Market? If so, what can be done?”, above n 96, at 8.
252
Judy McGregor, Sylvia Bell and Margaret Wilson Fault Lines: Human Rights in New Zealand (AUT
University, Auckland, 2015) at 85.
246
39
There is a strong case that pay equity does work to increase the wages of some of the least
privileged workers in New Zealand, and that it can remedy the systemic undervaluation of
women’s work. Once the arguments are evaluated, it becomes clear that New Zealand
should have pay equity legislation.
40
V Conclusion
New Zealand is at point where crucial decisions must be made concerning the future of pay
equity. These decisions will have far-reaching consequences for the many women and the
few men working in undervalued female-dominated occupations, as well as for employers
and the economy at large. This dissertation argues that the way forward is new pay equity
legislation. The systemic undervaluation of women’s work has persisted in New Zealand’s
labour market for too long, and should not be permitted to endure unchallenged. Femaledominated occupations continue to be paid lower wages which do not adequately reflect
the skill, responsibility and effort involved in women’s work. All past efforts to install pay
equity in New Zealand have been unsuccessful, leading to the conclusion that any future
attempt should be in the form of pro-active, purpose built legislation, which will have the
best chance of success in New Zealand’s current deregulated labour market. Finally, there
are clear, convincing arguments in favour of pay equity legislation to support its
implementation, while the arguments against pay equity fail to stand up under scrutiny.
Women like Kristine Bartlett want to continue to work in the occupations they love. As she
has explained:253
I’m obsessed with my work…It’s really hard, tiring, exhausting work. You’ve got to
have compassion and empathy to be a carer. I’ve nursed people in their last days on
Earth and we comfort their families as well. It isn’t just showers and wiping bottoms.
Women just want to receive fair remuneration for the jobs that they do, and have society
acknowledge that women’s work is valuable and crucial to the running of New Zealand.
253
Underhill, above n 128.
41
VI Bibliography
A
Case Law
New Zealand Clerical Administrative etc IAOW v Farmers Trading Co Ltd [1986] ACJ
203.
Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd
[2013] NZEmpC 157, [2013] ERNZ 504.
Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc
[2013] NZCA 575.
Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc
[2014] NZSC 196.
B
Legislation
Employment Contracts Act 1991.
Employment Equity Act 1990.
Employment Relations Act 2000.
Equal Pay Act 1972.
Factories Act 1946.
Government Services Equal Pay Act 1960.
Machinery Act 1950.
New Zealand Bill of Rights Act 1990.
Shops and Offices Act 1955.
C
Treaties
International Labour Organisation Convention Concerning Equal Remuneration for Men
and Women Workers of Equal Value (No 100) 165 UNTS 303 (opened for signature 29
June 1951, entered into force 23 May 1953).
United Nations Convention on the Elimination of (All Forms of) Discrimination against
Women 1249 UNTS 13 (opened for signature 18 December 1979, entered into force 3
September 1981).
42
D
Books and Chapters in Books
Maya Altman Comparable Worth: Every Woman's Right (Albany, New York, 1983).
Penelope Brook The Inequity of ‘Pay Equity’: Comparable Worth Policy in New Zealand
(The New Zealand Centre for Independent Studies, Auckland, 1990).
Paula England Comparable Worth: Theories and Evidence (Aldine De Gruyter, New
York, 1992).
Paula England “Socioeconomic Explanations of Job Segregation” in Helen Remick (ed)
Comparable Worth and Wage Discrimination: Technical Possibilities and Political
Realities (Temple University Press, Philadelphia, 1984).
Jeanne Gregory, Rosemary Sales and Ariane Hegewisch (ed) Women, Work and
Inequality: The Challenge of Equal Pay in a Deregulated Labour Market (MacMillam
Press Ltd, London, 1999).
Morley Gunderson Comparable Worth and Gender Discrimination: An International
Perspective (International Labour Organisation, Geneva, 1994).
Catherine Holst “Institutional Variation and Normative Theory: Lessons from a Local
Equal Pay Controversy” in Fredrik Engelstad and Anniken Hagelund (ed) Cooperation
and Conflict the Nordic Way: Work, Welfare, and Institutional Change in Scandinavia
(De Gruyter, Warsaw, 2015).
Peggy Kahn and Elizabeth Meehan (ed) Equal Value/Comparable Worth in the UK and
the USA (MacMillam Press Ltd, London, 1992).
Michael McCann Rights at Work: Pay Equity Reform and the Politics of Legal
Mobilization (University of Chicago Press, Chicago, 1994).
Judith A McDonald and Robert J Thornton “Comparable Worth/Work of Equal Value” in
Nancy A Naples (ed) The Wiley Blackwell Encyclopedia of Gender and Sexuality Studies
(Wiley Blackwell, 2016).
Judy McGregor, Sylvia Bell and Margaret Wilson Fault Lines: Human Rights in New
Zealand (AUT University, Auckland, 2015).
Claudia Mills “Paying Women What They are Worth” in Claudia Mills (ed) Values &
Public Policy (Harcourt Brace Jovanovich College Pub, 1992).
Martin Oelz, Shauna Olney and Manuela Tomei Equal Pay: An Introductory Guide
(International Labour Organisation, Geneva, 2013).
Maeve Quaid The Myth of Equitable Job Evaluation (University of Toronto Press,
Toronto, 1993).
43
Helen Remick and Ronnie J. Steinberg “Technical Possibilities and Political Realities:
Concluding Remarks” in Helen Remick (ed) Comparable Worth and Wage
Discrimination: Technical Possibilities and Political Realities (Temple University Press,
Philadelphia, 1984).
Helen Remick (ed) Comparable Worth and Wage Discrimination: Technical Possibilities
and Political Realities (Temple University Press, Philadelphia, 1984).
Sharon Toffey Shepela and Ann T. Viviano “Some Psychological Factors Affecting Job
Segregation and Wages” in Helen Remick (ed) Comparable Worth and Wage
Discrimination: Technical Possibilities and Political Realities (Temple University Press,
Philadelphia, 1984).
Elaine Sorensen Comparable Worth: Is it a Worthy Policy? (Princeton University Press,
New Jersey, 1994).
Ronnie J. Steinberg “‘A Want of Harmony’: Perspectives on Wage Discrimination and
Comparable Worth” in Helen Remick (ed) Comparable Worth and Wage Discrimination:
Technical Possibilities and Political Realities (Temple University Press, Philadelphia,
1984).
Stephanie Steinmetz The Contextual Challenges of Occupational Sex Segregation:
Deciphering Cross-National Differences in Europe (VS Verlag für Sozialwissenschaften,
Germany, 2012).
E
Journal Articles
Celia Briar, “New Zealand Conference on Pay and Employment Equity for Women”
(2004) 23 Social Policy Journal of New Zealand 215.
Paula England and Nancy Folbre “The cost of caring” (1999) 561 The Annals of the
American Academy of Political and Social Science 39.
Paula England and Peter Lewin “Economic and Sociological Views of Discrimination in
Labor Markets” Persistence or Demise?” (1989) 9 Sociological Spectrum 239.
Nancy Folbre “Should Women Care Less? Intrinsic Motivation and Gender Inequality”
(2012) 50(4) British Journal of Industrial Relations 597.
Morley Gunderson “Male-Female Wage Differentials: How Can That Be?” (2006) 39(1)
The Canadian Journal Economics 1.
Suzanne Hammond and Raymond Harbridge “Women and Enterprise Bargaining: The
New Zealand Experience of Market Deregulation” (1995) 37(3) The Journal of Industrial
44
Relations 359.
Linda Hill “Equal pay for equal value: The case for care workers” (2013) 27(2) Women’s
Studies Journal 14.
Linda Hill “Equal pay for work of equal value: making human rights and employment
rights laws work together” (2004) 21 Social Policy Journal of New Zealand 1.
Prue Hyman “All the way for Equal Pay” (2013) 19(8) Kai Tiaki: Nursing New Zealand
13.
Prue Hyman “Equal pay for work of equal value – job evaluation issues” (1988) 13 New
Zealand journal of industrial relations 237.
Prue Hyman “Is Active Intervention Still Needed to Improve the Position of Women in
the New Zealand Labour Market? If so, what can be done?” (2015) 11(1) Policy
Quarterly 3.
Prue Hyman “Pay Equity and Equal Employment Opportunity in New Zealand:
Developments 2008/2010 and Evaluation” (2010) 36(1) New Zealand Journal of
Employment Relations 65.
Prue Hyman “Pay Equity and Equal Employment Opportunity in New Zealand:
Developments 2006/2008 and Evaluation” (2008) 33(3) New Zealand Journal of
Employment Relations 1.
Michael Levin “The Feminist Road to Socialism” (1984) 78(3) Commentary 13.
Rosemary Du Plessis Novitz and Nabila Jaber “Pay equity, the ‘free’ market and state
intervention” (1990) 15 New Zealand Journal of Industrial Relations 251.
Barbara Pocock “Equal Pay Thirty Years On: The Policy and Practice” (1999) 32(3) The
Australian Economic Review 279.
Paul Roth “Employment Law” [2016] NZ L Rev (forthcoming).
Patricia Todd and Alison Preston “Gender Pay Equity in Australia: Where Are We Now
And Where Are We Heading?” (2012) 38(3) ABL 251.
F
Parliamentary and Government Materials
(29 August 1972) 380 NZPD 2178.
(29 August 1972) 380 NZPD 2181.
45
G
Reports
Francine D. Blau and Lawrence M. Kahn The Gender Wage Gap: Extent, Trends, and
Explanations (Institute for the Study of Labour, Discussion Paper No. 9656, January
2016).
Philip Borkin Closing the Gender Gap: Plenty of Potential Economic Upside (Goldman
Sachs, August 2011).
Marie-Thérèse Chicha A comparative analysis of promoting pay equity: models and
impacts (International Labour Office, Working Paper 49, September 2006).
Marie-Thérèse Chicha Promoting equity: Gender-neutral job evaluation for equal pay: A
step-by-step guide (International Labour Organisation, 2008).
Commission of Inquiry into Equal Pay Equal Pay in New Zealand (A. R. Shearer,
Government Printer, H. 54, September 1971).
Megan Gerecke A policy mix for gender equality? Lessons from high-income countries
(International Labour Organisation, 2013).
Ministry of Women’s Affairs Next Steps Towards Pay Equity: A background paper on
equal pay for work of equal value (September 2002).
Ministry of Women’s Affairs Report on the Effectiveness of the Equal Pay Act 1972
(September 1994).
Ministry of Women’s Affairs Report on public submissions to Next Step Towards Pay
Equity: A Discussion Document (May 2003).
National Advisory Council on the Employment of Women Critical Issue for New
Zealand Women’s Employment, Now and in the Future (Department of Labour, June
2008).
Pay and Employment Equity Unit Gender Bias in Job Evaluation: A Resource Collection
(Department of Labour, April 2008).
Jill Rubery Pay equity, minimum wage and equality at work: theoretical framework and
empirical evidence (International Labour Office, Working Paper 19, 2003).
Statistics New Zealand Women at Work: 1919-2013 (October 2015).
Margaret Wilson Towards Employment Equity: Report of the Working Group on Equal
Employment Opportunities and Equal Pay (Working Group on Equal Opportunities and
Equal Pay, 1988).
46
H
Dissertations
Martha Coleman “The Equal Pay Act 1972: Back to the Future?” (LLB(Hons)
Dissertation, University of Victoria, 1996).
Grace Catherine Miles “From Equality to Equity: The Pursuit of Pay Equity Under The
Equal Pay Act 1972” (LLB(Hons) Dissertation, University of Victoria, 2015).
Kirsten Slatter “Towards pay equity in New Zealand? A study of the Employment Equity
Act 1990” (BA(Hons) Dissertation, University of Otago, 1990).
I
Internet Resources
Paula Bennet and Michael Woodhouse “Pay equity meeting an important milestone” (17
November 2015) The official website of the New Zealand Government
<www.beehiv.govt.nz>.
Paula Bennet and Michael Woodhouse “Pay equity working group reports back” (7 June
2016) The official website of the New Zealand Government <www.beehiv.govt.nz>.
CEVEP “UN Coventions” (24 September 2013) CEVEP – campaign for equal value
equal pay <www.cevepnz.org.nz/>.
Coalition for Equal Value Equal Pay “1940s to 1960s” (February 2004)
<www.cevep.org.nz/>.
Megan Cook “Women’s labour organisations – Women’s unions and associations, 1878
to 1939” (5 May 2011) Te Ara – the Encyclopedia of New Zealand
<www.teara.govt.nz/>.
Mark Derby “Strikes and labour disputes – The Industrial Conciliation and Arbitration
Act” (1 March 2016) Te Ara – the Encyclopedia of New Zealand <www.teara.govt.nz/>.
Joint Working Group on Pay Equity Principles “Terms of Reference” (17 November
2015) State Services Commission <www.ssc.govt.nz/>.
Ministry for Women “Gender Pay Gap” <www.women.govt.nz/>.
Ministry for Women “Occupational Segregation” <www.women.govt.nz/>.
New Brunswick’s Wage Gap Reduction Initiative “Wage Gap Contributor: Undervaluation of Traditional Female Occupations” <www.gnb.ca>.
New Zealand Aged Care Association “Equal Pay Case” <www.nzaca.org.nz/>.
June Ellenoff O'Neill “The Concise Encyclopedia of Economics: Comparable Worth”
(2002) Library of Economics and Liberty <www.econlib.org/>.
47
Michael Sharp “Why a Free Market Wage System Doesn’t Work” (5 March 2015) Briefing
Papers <www.briefingpapers.co.nz>.
Statistics New Zealand “2013 Census QuickStats about work and unpaid activities: Work
and labour force status of adults in New Zealand” (31 March 2015)
<www.stats.govt.nz/>.
J
Newspaper and Magazine Articles
Eileen Goodwin “Recommendation over pay may just be ‘delay’” Otago Daily Times
(online ed, Dunedin, 9 June 2016).
Prue Hyman “Equal pay – the case for action now” New Zealand Herald (online ed, New
Zealand, 9 February 2016).
Stacy Kirk and Sam Sachdeva “Government to address pay equity, care giver wages”
Stuff (online ed, New Zealand, 20 October 2015).
Catriona MacLennan, Vicky Mee and Judy McGregor “Opinion: NZ should legislate to
promote pay equality” New Zealand Herald (online ed, New Zealand, 10 June 2016).
Jonathan Underhill “Unions and business come together in a fair pay plan” New Zealand
Listener (online ed, New Zealand, 7 July 2016).
H
Other Resources
Pat Armstrong “Pay Equity Lessons from Canada” (paper presented to New Zealand
Conference on Pay and Employment Equity for Women, Wellington, June 2004).
Coalition for Equal Value Equal Pay “Submission to the Working Party on Employment
Equity” (December 1990).
Mary Cornish “Securing Pay Equity for Women’s Work – Everyone Benefits – The
International Experience” (paper presented to the
International Seminar, Equal Pay for
Work of Equal Value, convened by the ILO Southern Cone Sub-regional Office,
Santiago, Chile, August 25 2008).
Lisa Davies and Natalie Jackson Women's Labour Force Participation in New Zealand:
The Past 100 Years (paper prepared for the Population Studies Centre, University of
Waikato, 1993).
Marie Dwyer “The Economic Rationales for Narrowing the Gender Gap” (paper
presented to the National Advisory Council on the Employment of Women, June 2016).
48
Paula England and others “Does Bad Pay Cause Occupations to Feminize, Does
Feminization Reduce Pay, and How Can We Tell with Longitudinal Data?” (paper
presented to annual meeting of the American Sociological Association, San Francisco,
August 2004).
Prue Hyman “Low Waged Work and Gender Pay Equity in New Zealand” (paper
presented to New Zealand Conference on Pay and Employment Equity for Women,
Wellington, June 2004).
Elizabeth Orr “Equal Pay for Work of Equal Value in New Zealand: A History of the
1960 and 1972 Equal Pay Acts” (paper presented to the Women’s Studies Conference,
Palmerston North, November 2003).
Letter from Patsy Reddy (Crown Facilitator) and others to Paula Bennett (Minister of
State Services) and Michael Woodhouse (Minister for Workplace Relations and Safety)
regarding Recommendations of the Joint Working Group on Pay Equity Principles (24
May 2016).
49